REMUNERATION MODELS FOR ARTISTS: Copibec's position

On November 29, 2018, Copibec’s Executive Director, Frédérique Couette, appeared before the Standing Committee on Canadian Heritage as part of its examination of the remuneration models for artists and creative industries in the context of copyright.

This is our translation of Ms. Couette’s remarks to the Committee in French.

Remarks by Frédérique Couette

Thank you for welcoming us here today. My name is Frédérique Couette and I am the Executive Director of Copibec, whose official name is the Société québécoise de gestion collective des droits de reproduction.

Founded in 1997, Copibec is the copyright collective created by Quebec authors and publishers. Operating as a not-for-profit, we grant reproduction rights licences and distribute royalties to authors, freelance journalists, creators and publishers. Every year, we administer millions of content uses in paper- and digital formats. Those content use requests would otherwise been too complicated for rightsholders and users to handle individually. Collective licensing is the exercise of copyright and related rights by organizations acting in the interest and on behalf of the owners of those rights.

The Union des écrivaines et écrivains québécois (UNEQ) will be giving you an overview of the economic situation for Quebec writers, only 10% to 15% of whom can live off the proceeds of their writing. In a market as small as ours, where a book is considered a bestseller if it sells 3,000 copies, copyright income from sources other than selling works is supremely important for authors and their publishers. Copyright compliance is therefore essential in order to ensure that authors continue to engage in creative endeavours and that the publishing industry can survive. The total of approximately $200 million that Copibec has distributed to authors and publishers during the past 20 years has been instrumental in sustaining an innovative arts and culture sector.

During the Copyright Act review process leading up to the 2012 amendments, we warned the Members of Parliament and the government that introducing too many exceptions in the Act and adding the word “education” to the fair dealing exception would negatively impact the revenues of authors and publishers. Sadly, we can now ascertain that, for the most part, our concerns have in fact become reality.

At the time, representatives from the education sector said that the legislative changes were simply a clarification and that the licences would continue to be paid. And yet, within months following the amendments, Quebec universities wanted to renegotiate their Copibec licences and were asking for an 18% reduction in the annual royalty per student. Since then, royalties have further declined every time the licensing agreements with Quebec CEGEPs and universities were renegotiated. As a result, the annual royalty per university student has fallen nearly 50%, going from $25.50 in 2012 to $13.50 in 2017, while the per-student royalty at the CEGEP/college level has dropped 15%.

In the other provinces, as early as January 2013, universities, colleges and education ministries terminated their licences with Access Copyright, forcing copyright owners into wave after wave of legal proceedings. The educational institutions gave themselves institution-wide permission to systematically reproduce excerpts free of charge, whereas they had previously paid for that content through licences from a copyright collective. In June 2014, Université Laval followed in those footsteps and decided not to renew its licence with Copibec, which meant that copyright owners had to initiate a class action against the educational institution. Fortunately, Copibec and the university recently reached an out-of-court settlement that led to a favourable outcome for all the parties involved.

It is clear that the number of legal proceedings has multiplied over the past five years and that revenues from collective licensing have eroded constantly because of pressure from the education sector. For example, since 2012, even though Copibec held its administration fees at 15%, our authors, creators and publishers have been faced with a 23% decrease in the royalty paid for each page reproduced by universities.

The impact of this ongoing decline in collective licensing revenues has been considerable because the education sector accounts for close to 75% of the licensing revenues distributed by Copibec. Quebec authors, creators and publishers have been the hardest hit, since most of the 72 million copies reported to us annually originate from Quebec works. Our authors and creators are suffering the full brunt of the decline in collective licensing revenues, while their already precarious situation and their financial capacity to create content are deteriorating further and further with every decline in revenues from one of the links in the copyright chain. This also weakens our companies in the publishing sector, since 80% of the content uses reported to us annually concern books, and the resulting royalties represent on average 18% of the publishers’ net profits. Given our small market, collective licensing royalties play a significant role in sustaining cultural magazines, keeping our publishing houses alive so they can continue to tell our stories, making Quebec dramatic works or First Nations literature accessible, and producing educational content that meets the specific needs of our school system as well as students with learning disabilities.

We cannot be blind to the fact that the development of our culture and the understanding we have of our cultural heritage are at stake.

Faced with declining revenues and the transformations driven by digital technology, copyright owners have not remained idle and have been able to adapt their copyright collective to the new needs of content users. For example, when digital reproduction became possible, copyright owners gave Copibec authority to manage new rights. Even though photocopying remains the preferred reproduction method in the education sector, our licences now cover other uses such as in-class displays, scanning, learning management systems and content sharing among students using tablets.

Thanks to our SAVIA licensing system, users can request copyright clearance online and we can expedite the process of managing data and making payments to rightsholders.

In partership with publishers, we developed our DONA service that enables educational institutions to order content in a digital format adapted to the needs of students with perceptual disabilities. DONA will continue to evolve so that it can more effectively meet the needs of institutions and students.

In 2014, together with our partners, we also launched SAMUEL, which stands for Simplified Access for Miltidisciplinary Education and Learning, to give Quebec schools and colleges, as well as French-speaking communities outside Quebec and First Nations school boards, access to a diverse range of high-quality Canadian French-language content through a digital content platform.

We are continuing to innovate in order to realize the true value of our culture and make it easier for content to be discovered while favouring accessibility and remuneration.

When it comes to the remuneration model for copyright owners, collective licensing is a key revenue source for authors and publishers. Recognized worldwide, it is an effective, flexible model that guarantees access and cultural diversity. It is part of modern, forward-looking approach for a society that invests in its culture during the digital age.

Despite the unfortunate drop in royalties, Quebec's experience with collective licensing offers a powerful model that has evolved to adapt to users' needs without ever losing sight of the need to combine content accessibility with remuneration for content use. Under this model, the amount of the annual royalty paid for using content has always been very affordable. That royalty currently represents an average of less than ½ of 1% of the total annual tuition for a Quebec university student. For the university itself, it represents less than 1/10 of 1% of its annual operating budget.

Royalties paid for reproducing excerpts from published content have never endangered the Canadian education system or created a burden in terms of student debt.

Even though this Committee is not directly associated with the Copyright Board reform, I would like to point out that we are deeply disappointed that the reforms proposed to modernize the Copyright Board do not address the issue of harmonizing the statutory damages awarded to copyright collectives. The Copyright Act review that you are involved in will be a lengthy process and, during that time, Quebec authors and creators will not be receiving the royalties to which they are entitled for the massive use of their content by educational institutions outside Quebec. This situation persists even though the Copyright Board has certified tariffs and the Federal Court has issued a decision clearly establishing that the reproduction policies of those educational institutions are not fair. This crucial issue needs to be resolved by amending the legislation. In the meantime, we urge the federal government to act now to help restore the healthy, lasting and necessary relationships between the education community and the authors of literary works through their copyright collectives.

I would like to end my presentation with a quote from the Creative Canada Policy Framework (2017) as it relates to the Copyright Act review: “Our copyright framework remains a vital part of our creative economy, and will continue to do so in the future. A well-functioning copyright regime should empower creators to leverage the value of their creative work, while users continue to enjoy access to a wide range of diverse cultural content.” Collective licensing fits in perfectly with these objectives and strikes the difficult balance between access and remuneration.